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Saturday, July 25, 2015

LAUSD FOOD SERVICE AUDIT ALLEGATIONS STILL UNDER INTERNAL REVIEW

7/19/15, 4:52 PM PDT | More than a year after completing the first draft of an audit that questions cozy relationships with contractors and multi-million dollar deals, Los Angeles Unified’s inspector general can’t say whether there was criminal wrong-doing.

The final audit was released last week, but the inspector general’s office continues to classify the issues uncovered as an “open investigation” not yet prepared for the review of criminal prosecutors in the Los Angeles County District Attorney’s Office.

In November, the inspector general’s investigation unit was called-in to begin reviewing allegations that could rise to criminal activity, but more than six months later “it would be inappropriate to speculate on the outcome” of that review, according to a written statement from the school district.

District officials said they could not estimate when the investigation might be concluded.

But if the inspector general, “determines that there is reasonable cause to believe that an employee has engaged in illegal activity, the nature and details of the activity shall be reported on a ‘timely basis,’ to the DA or attorney general” according to a district statement that cited state law.

In the meantime, the man at the center of allegations made in the audit, Food Services Director David Binkle remains on paid leave.

Binkle, who earns $152,000 a year, has been on leave since December 4. The district declined to comment on why Binkle has neither been sent back to work or dismissed.

A high-profile proponent of healthy eating, Binkle has appeared at the White House alongside first lady Michelle Obama and starred in Tedx Talks.

Inspector General Ken Bramlett clarified one of the claims made in the audit.

According to the audit, “it is not clear why” the district agreed to pay an extra 15.5 percent for every dinner it served under a five year $50 million contract.

The meals could have been purchased directly from LAUSD contractor Five Star Gourmet, according to the audit.

But instead, Binkle met with another contractor, Gold Star Foods, and it was decided that the district would buy Five Star Gourmet dinners through Gold Star, increasing the cost of each meal from $1.20 to $1.48.

In response to questions, Bramlett explained the increased cost was charged for transportation costs, as Five Star Gourmet sold the dinners to Gold Star, which transported the meals.

Gold Star’s role, transporting the meals, was not mentioned in the audit.

Another deal brought into question by the audit was an agreement with a public relations firm. According to the audit, Tatum Wan Co. collected $108,518 more than it was entitled to receive under contract.

The additional charges, Tatum Wan said, covered the cost of expenses for numerous events, including a culinary competition in Washington, D.C., called Cooking up Change. The fees collected by her company for services, she said, did not exceed the $200,000 permitted by the subcontract her company was working under.

The audit also brought into question the relationship between Binkle and the two contractors.

At Binkle’s request, Five Star paid the airfare and lodging for two employees to attend a conference.

The trip is being investigated, because “asking a contractor to pay for airfare and hotel accommodations is clearly in violation of the Employee Code of Ethics and state’s Contractor Code of Ethics.

While Binkle contended the trip was part of the contract reached with Five Star, the legal agreement simply states the company would “train district food services staff on food safety, food handling, storage, recalls, ordering billing and accounting,” according to the audit.

In 2011, Binkle was given near complete control of contracts, under a decision that was supposed to cut the administrative costs by skipping standard vetting processes, according to the audit.

The audit also described massive waste, as food services’ operating deficit more than tripled over three years leading up to the $78.6 million shortfall in 2013.

But even as the budget ballooned to $341 million, the district served nearly 900,000 fewer meals in 2013 compared with the 2010 fiscal year.

The increased budget reflects a 41 percent increase in the cost of food bought by the district. While the rising cost can partially be attributed to buying healthier food, the lax contracting practices led to a lack of competition and likely higher prices, according to the audit.